Why does the selling stop today? Very simple. Today is the last day for a trade to settle in September, T+3.
September is the month that the mutual funds do their tax selling. Most end their fiscal year in September. As such, they sell their dogs in September. So the selling is complete. Watch to see how $GILD and $BMY trade from here. It should improve as they were down -20% and -19%.
It was funny to see several well known analysts and media pundits recommend these names in September. They should know better.
Through 9/2 there were 4,586 stocks higher and 1,963 were lower which did not make this a huge year for tax selling. However, it was enough to cause September to be sideways to slightly lower, -1.14% through yesterday.
In my opinion, stocks to focus on for the rest of the year are stocks that are basing with heavy short interest where the short rarely make money with good fundamentals. Shorts in these names will get their faces ripped off by the dreaded Q4 Rally that materializes every year and as produced double digit gains in 2013,2014 and 2015.
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Some good insights here.
that Q4 rally is based on what fundamentals? seriously. earnings, debt, p/e, buybacks? collecting nickels in front of steamrollers is what i’m seeing.
Huh? Mutual funds do all their tax loss selling in Q3, therefore we will trade higher in q4, because that happened the past three years? Is there anything special about this year that is different from the past three? Did you bother to go back to see what happens in Q4 of a non-incumbent election year? I wouldnt follow your trades even with your money Divergence. This post’s nonsense is only bested by your “Brexit is guaranteed not to happen, my friends in Singapore did a survey and they havent been wrong on Brexit votes …..ever”
agreed.